February 22, 2013

DOJ Intervenes in Whistleblower Suit Against Lance Armstrong

For a couple of years, the federal government has remained on the sidelines of a lawsuit in Washington that alleges Lance Armstrong and others made false claims to the U.S. Postal Service in connection with the agency's sponsorship of a professional cycling team.

The U.S. Justice Department announced today, ending months of speculation, that the government is jumping into the suit to back the plaintiff, Floyd Landis, who rode with Armstrong on the professional team the USPS-sponsored between 2002 and 2004. The government alleges Armstrong's use of performance-enhancing substances was a violation of the USPS sponsorship agreement. This amended complaint was filed today.

"Lance Armstrong and his cycling team took more than $30 million from the U.S. Postal Service based on their contractual promise to play fair and abide by the rules—including the rules against doping,” Ronald Machen Jr., the U.S. Attorney for the District of Columbia, said in a statement. “The Postal Service has now seen its sponsorship unfairly associated with what has been described as ‘the most sophisticated, professionalized, and successful doping program that sport has ever seen.’"

Lawyers who represent whistleblower said the case will be closely watched for what will likely be the battlefield of the dispute: Was the USPS harmed?

Armstrong's attorney, Patton Boggs litigation partner Robert Luskin, said in a statement today that Armstrong "worked constructively over these last weeks with federal lawyers to resolve this case fairly, but those talks failed because we disagree about whether the Postal Service was damaged. The Postal's Services own studies show that the Service benefited tremendously from its sponsorship—benefits totaling more than $100 million."

Whistleblower suits often sit for years under seal as the government decides whether to intervene. Landis filed suit in 2010. His case was unsealed as of early this afternoon following DOJ's move to get involved—a decision that whistleblower attorneys said didn't come lightly.

"The United States invests considerable resources in the investigation of cases, interviewing witnesses and reviewing documents, to consider the validity of the claim by the whistleblower," said Colette Matzzie of the whistleblower firm Phillips & Cohen in Washington. "It's a lengthy internal deliberative process for the government."

Matzzie said DOJ's intervention can be viewed as a validation of Landis' claims. DOJ lawyers, she said, likely interviewed Landis as part of the decision whether to intervene.

The government investigation, Matzzie added, would have gone beyond an examination of a false claim itself. "What the United States is looking for is not simply whether the claim was false but that it was knowingly false," she said. The government, Matzzie continued, would have had to find sufficient evidence to decide to intervene.

Robert Vogel of the Washington whistleblower firm Vogel, Slade & Goldstein said DOJ intervention in a False Claim Act suit is a "huge boost" for a plaintiff. Government participation, Vogel said, "definitely increases the odds of success in a case."

DOJ lawyers said Armstrong, who recently admitted to lying about his use of performance drugs, repeatedly denied using banned substances during the USPS sponsorships. A DOJ press statement today about the intervention noted Armstrong's recent interview with Oprah Winfrey. In his talk with Winfrey, Armstrong acknowledged using banned substances during each of his seven Tour de France victories.

Stuart Delery, the acting head of DOJ's Civil Division, said the government participation in Landis' suit "demonstrates the Department of Justice's steadfast commitment to safeguarding federal funds and making sure that contractors live up to their promises."